Carbon market: What is the Community Emissions Trading System?
Home Summary The European Union Emission Trading System (EU ETS) is a European mechanism aimed at reducing greenhouse gas emissions by limiting the number of
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June 29, 2025
The energy sector is the largest polluter, accounting for approximately 73% of global GHG emissions. Transportation and industry follow, with 16% and 21% of emissions, respectively. Agriculture and the building sector also contribute, with 14% and 6% of global emissions.
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Comparing GHG emissions by sector helps identify the main sources of emissions and allows for targeted actions to reduce them. Each sector contributes differently to global warming, which justifies an adapted approach to achieving global climate goals, such as those set by the Paris Agreement. This sectoral analysis allows for the distribution of emission reduction efforts according to the impact of each sector, ensuring a more effective decarbonization process.
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The energy sector remains the primary source of global greenhouse gas emissions, accounting for approximately 73% of total emissions, according to IPCC data. These emissions come primarily from the combustion of fossil fuels to produce electricity, heat, or fuels. Three major sources dominate the energy sector: coal, oil, and natural gas, each with a distinct climate impact.
Coal is the energy source with the highest CO₂ emissions per kilowatt-hour produced, averaging approximately 820 g of CO₂/kWh. Widely used in thermal power plants, particularly in China and India, it still constitutes a significant portion of the global energy mix. Oil, used primarily in transportation and industry, emits approximately 640 g of CO₂/kWh. Finally, natural gas, often presented as a transitional energy, emits approximately 490 g of CO₂/kWh. While its direct emissions are lower, fugitive methane emissions during extraction and transportation must also be taken into account.
The distribution of energy-related emissions varies considerably by region. China is currently the world’s largest emitter in this sector, largely due to its heavy reliance on coal to power its industry and electricity grid. The United States, for its part, has high emissions, but they are gradually declining thanks to the transition to gas and renewable energies. India, experiencing rapid economic growth, is also seeing its energy emissions increase rapidly. Conversely, several European countries, such as France and Sweden, have a more carbon-free energy mix, particularly thanks to nuclear and hydropower.
To break away from this dependence on fossil fuels, low-carbon technologies are being developed, such as the use of renewable energies (solar, wind, hydropower, geothermal). Furthermore, promising innovations, such as small modular reactors (SMRs), currently under development in several countries, aim to produce nuclear electricity more flexibly and securely.
Green hydrogen, produced by electrolysis of water using renewable electricity, also offers a decarbonization avenue for sectors that are difficult to electrify. Several countries, including Germany, South Korea, and Australia, are investing heavily in this promising sector.
The transport sector accounts for approximately 16% of global greenhouse gas emissions, according to data from the International Energy Agency. It still relies heavily on the use of fossil fuels, particularly in road transport, which remains the main contributor to these emissions. While mobility is a key driver of economic development, it also poses a major challenge in achieving carbon neutrality targets.
Approximately 75% of transport emissions come from road transport and reliance on internal combustion engine vehicles. Indeed, passenger cars, trucks, and buses rely heavily on gasoline or diesel, emitting CO₂ directly during combustion.
Air transport is responsible for approximately 11% of the sector’s emissions, and although it represents only a small share of global travel, its climate impact is amplified by emissions at altitude. Maritime transport, often overlooked, contributes approximately 10%, particularly due to the use of highly polluting heavy fuel oil. By comparison, rail transport remains one of the lowest-carbon modes, especially when electrified.
On an individual scale, a long-haul flight can generate several hundred kilos of CO₂ per passenger, while a gasoline-powered car journey emits around 120 g of CO₂/km. Conversely, an electric train can produce emissions below 5 g of CO₂/km/passenger, depending on the electricity source used. This disparity highlights the importance of changing habits and adopting lower-emitting means of transport.
Faced with the climate emergency, solutions are being developed to reduce transport emissions. Vehicle electrification is growing rapidly, driven by improved batteries, increased range, and purchase incentive policies. Many countries have set deadlines for the end of sales of combustion-engine cars (e.g., 2035 in the European Union).
The development of low-carbon public transport (electric buses, trams, metros) also helps limit emissions in urban areas. Some cities such as Amsterdam, Oslo, and Paris have implemented ambitious policies to promote soft mobility, ban polluting vehicles from city centers, and develop cycle paths.
Other avenues for innovation include alternative fuels: advanced biofuels, green hydrogen, or synthetic fuels produced from captured CO₂. Although still expensive, these fuels could help decarbonize sectors such as aviation and maritime transport.
Reducing emissions does not rely solely on technology. Rethinking cities, limiting urban sprawl, and bringing living and working spaces closer together are all levers for reducing the need for travel. Furthermore, individual behavior plays a crucial role: favoring cycling, carpooling, public transport or even limiting air travel are all concrete actions to reduce one’s carbon footprint.
The industrial sector accounts for approximately 21% of global greenhouse gas emissions, according to IPCC estimates. This high level is due to the high energy intensity of industrial processes, the massive use of fossil fuels, and direct emissions from chemical reactions. Industry plays a central role in the global economy, but it is also one of the most complex sectors to decarbonize.
Certain industrial activities account for the majority of emissions:
Other sectors such as glassmaking, aluminum, and textiles also contribute to industrial emissions, although to a lesser extent on a global scale.
Industrial energy consumption still relies heavily on fossil fuels. Coal, natural gas, and oil are used to produce heat and electricity, or to power specific industrial processes. In some countries such as China and India, industry accounts for a dominant share of national energy demand, making its transformation crucial to achieving climate objectives.
To reduce its carbon footprint, industry can rely on several levers:
Thus, some industrial groups are taking the lead and innovating to reduce their GHG emissions:
These initiatives remain costly and limited in volume for now, but they herald the industry of the future: cleaner, more resource-efficient, and integrated into a renewable energy ecosystem.
The transition of the industrial sector is one of the greatest challenges of global decarbonization. Heavy equipment has long life cycles (often several decades), and the investments required to transform processes are colossal. However, social demand, climate regulations, and rising carbon prices are increasingly encouraging companies to commit to a low-carbon future.
The agricultural sector is responsible for approximately 14% of global greenhouse gas emissions, but its climate impact extends beyond this figure. Indeed, agriculture closely interacts with land use, deforestation, and food supply chains, making it a complex and cross-cutting sector. Unlike energy or industry, agricultural emissions are not primarily due to CO₂, but to two other, even more potent greenhouse gases: methane (CH₄) and nitrous oxide (N₂O).
Added to this are emissions linked to intensive plowing, monoculture, energy consumption for agricultural machinery, and food transportation. These practices, often derived from intensive conventional agriculture, also contribute to soil degradation, biodiversity loss, and water resource depletion.
To reduce these emissions, sustainable alternatives are emerging:
These different approaches not only reduce emissions but also increase the resilience of agricultural systems to the impacts of climate change.
The impact of agriculture on GHG emissions is also linked to dietary choices. In particular, meat production, particularly beef, is much more polluting than that of plant-based proteins. According to the FAO, one kilo of beef emits on average more than 60 kg of CO₂e, compared to less than 5 kg for legumes. Thus, adopting a more plant-based diet, reducing food waste, and favoring short supply chains are all effective levers for reducing the carbon footprint of the agri-food system.
Several countries have already initiated ambitious agricultural transitions:
Agriculture is one of the few sectors that can both reduce emissions and capture carbon, through sequestration in soils and plant biomass. This makes it a key player in achieving carbon neutrality. However, making this transition a success requires profound changes: financial support for farmers, training, access to innovation, adaptation of agricultural policies and reform of the CAP (Common Agricultural Policy) in Europe.
The building sector, including housing, offices, and public infrastructure, accounts for approximately 6% of global greenhouse gas emissions. These emissions come from both the energy consumption of buildings (heating, air conditioning, lighting, electrical equipment) and emissions incorporated into construction materials (concrete, steel, glass).
Direct emissions from the residential and tertiary sectors are linked to the combustion of fossil fuels (natural gas, fuel oil, coal) for heating and hot water. Added to this are indirect emissions from the production of electricity used in buildings, when this comes from non-renewable sources.
Furthermore, the construction and renovation of buildings also generate a significant carbon footprint. Materials such as concrete (made from cement), steel, and synthetic insulation materials are very energy-intensive to produce. These are referred to as gray emissions, often invisible to users but significant on a building scale.
The energy renovation of existing buildings is a crucial lever for reducing emissions in the sector. Indeed, many homes, particularly in Europe, are poorly insulated, poorly ventilated, and heavily dependent on fossil fuels.
Effective solutions exist:
Countries such as France and Belgium have implemented renovation assistance programs aimed at improving the energy efficiency of the building stock while reducing energy poverty.
For new construction, standards are intensifying. In France, the RE2020 (Environmental Renewal) now requires a gradual reduction in carbon emissions from new buildings, also integrating their environmental footprint across their entire life cycle. We’re talking about positive energy buildings (BEPOS) or passive buildings, capable of producing more energy than they consume.
Labels such as BBC (low-energy building), HQE, and BREEAM are also increasingly required in public tenders and private projects.
Innovations are also moving towards:
Furthermore, some cities are leading the way towards low-carbon neighborhoods:
Long perceived as a slow-moving sector, the construction industry is now undergoing rapid change. Reducing building emissions requires:
While major sectors such as energy, transportation, and agriculture account for the majority of global greenhouse gas emissions, other sectors, often considered secondary, also play a significant role in the global carbon footprint. Digital technology, waste, and forest use are three emblematic examples of indirect but growing contributions to emissions.
Often perceived as “intangible,” digital technology nevertheless generates very real emissions. Data centers, necessary for data storage and processing, operate 24/7 and require large amounts of energy to cool their servers. According to some estimates, digital technology currently represents between 3 and 4% of global GHG emissions, a figure that is constantly increasing with the explosion in usage.
Video streaming, cloud services, connected objects, and the growth of artificial intelligence are contributing to this increase. For example, one hour of high-definition streaming on a popular platform can generate up to 100g of CO₂, depending on the quality of the connection, the device used, and the location of the servers.
Solutions are emerging: improving the energy efficiency of data centers, powering them with renewable energy, or designing more energy-efficient digital services (eco-design, video compression, local hosting).
The waste sector is responsible for approximately 3% of global emissions, particularly through the degradation of organic waste in open-air landfills. This fermentation produces methane (CH₄), a greenhouse gas with very high global warming potential.
Emissions depend heavily on the treatment method used:
Reduction at source, efficient sorting, and material recovery (recycling, reuse) are the best strategies for limiting the sector’s carbon impact.
Forests play an ambivalent role in the carbon cycle. On the one hand, they act as natural sinks, absorbing carbon dioxide through photosynthesis. It is estimated that the world’s forests absorb around 2 billion tons of CO₂ each year.
But when they are destroyed, burned, or degraded, they become a massive source of emissions. Deforestation, particularly in the Amazon, Central Africa, and Southeast Asia, contributes both to the release of CO₂ stored in biomass and to reducing future absorption capacity.
Protecting forests, reforestation, restoring degraded areas, and practicing agroforestry are therefore essential actions to preserve this role as a climate regulator. Many carbon offset projects rely on these natural mechanisms.
Greenhouse gas emissions vary greatly from one country to another, not only in total volume but also in their sectoral distribution. Depending on the level of development, economic model, available natural resources, and public policies, each region of the world displays a unique emissions profile.
In industrialized countries, emissions are often dominated by:
Conversely, in emerging countries such as India, Indonesia, and Brazil:
In less developed countries, particularly in sub-Saharan Africa:
China is currently the world’s largest emitter, with a high share of its emissions coming from coal used in power generation and heavy industry. However, it is investing massively in renewables and electrification.
The United States stands out for its very high contribution to road transport. Efforts are focused on electrification, but oil-dependent infrastructure remains a major obstacle.
The European Union displays a more balanced profile, with notable efforts to improve energy efficiency, decarbonize the electricity mix, and regulate industrial emissions. Nevertheless, it remains a net importer of emissions through its trade.
This regional diversity means that universal solutions cannot be applied everywhere in the same way. An energy transition plan will not be identical in Germany, South Africa, or India. The challenge is to develop differentiated climate roadmaps, integrating:
This differentiated approach is also central to the principle of “common but differentiated responsibilities,” enshrined in the Paris Agreement, which recognizes that all countries must act, but according to their respective capabilities and responsibilities.
To comply with the Paris Agreement and limit global warming to +1.5°C or +2°C, global greenhouse gas emissions must be halved by 2030 and achieve carbon neutrality around 2050. This requires a profound transformation of all sectors of activity. Each sector must follow a specific trajectory, taking into account its emissions level, its reduction potential, and its technological maturity.
Achieving climate targets does not depend solely on governments or major international institutions. Businesses and citizens have a role to play in the transition to a low-carbon economy. Their involvement can accelerate the necessary structural changes in all emitting sectors.
Businesses, across all sectors, are both sources of emissions and key players in the transformation. They are increasingly being called upon to measure, reduce, and offset their carbon footprint using several tools:
But beyond these obligations, many companies see the ecological transition as an opportunity for innovation, cost reduction, and competitive differentiation. Reducing energy consumption, rethinking the supply chain, eco-designing products, and training employees are all levers that contribute to the sustainable transformation of their business.
Tools like D-Carbonize help structure this approach by facilitating data collection, emissions calculations, and the implementation of targeted action plans by sector.
On the citizen side, individual actions, although sometimes perceived as symbolic, can have a significant impact when adopted on a large scale. Everyone can take action on the most common sources of emissions:
The low-carbon transition can only succeed if businesses and citizens work together, each at their own level. Businesses create the supply, and individuals send strong signals through their demand. Local authorities, for their part, play a mediating role by facilitating infrastructure, support, and regulation. By promoting collaborative approaches and supporting green innovations, it becomes possible to transform each sector of the economy towards a more sober, more resilient model compatible with planetary limits.
Home Summary The European Union Emission Trading System (EU ETS) is a European mechanism aimed at reducing greenhouse gas emissions by limiting the number of
Home Summary Decarbonizing businesses aims to reduce greenhouse gas emissions by adopting sustainable practices, such as renewable energy and energy efficiency. It is essential to
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